Should private equity consolidate EDA?
In the last decade, the three major EDA companies (Synopsys Inc., Cadence Design Systems Inc., and Mentor Graphics Corp.) have had a combined market capitalization which has stayed largely flat (approx $9.5 billion). In this same time period, the leading hamburger manufacturer, MacDonalds, grew shareholder value by 3X (from $28 billion to $99 billion) and the leading household goods manufacturer, Proctor and Gamble, grew shareholder value by over 50 percet (from $121 billion to $185 billion). This situation is obviously not good for shareholders, but the relatively stagnant state of the industry is also negative for customers and employees.
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